Will Wilkinson was taken with this Mark Thompson post, and so was I - albeit for somewhat different reasons. The undercurrent in my frets about a future in which libertarians are absorbed into contemporary American liberalism, as you can probably tell, is my sense that there are real affinities between my own probably half-baked vision for conservative renewal and what the liberaltarians say they're up to; I see them as sparring partners on many issues, obviously, but as potential allies on many others.
So for instance, when Thompson writes that "by treating any and all social safety nets as irreversible steps on the Road to Serfdom, we allow liberals and progressives to shape those policies in ways that are inefficient, ineffective, and overbroad - even though Adam Smith, Hayek himself, and Friedman each advocated for a form of social safety net, demonstrating that social safety nets can be consistent with libertarianism," I think, this is exactly the way that conservatives more generally should be thinking about the welfare state. It's true that Grand New Party was written, in part, as a critique of a certain kind of "libertarianism" - the kind that sees Rudy Giuliani's "tax cuts plus nothing" primary campaign as a model for Republicans, for instance - and obviously the book partakes of a moralism that many libertarians find distasteful. But on a lot of fronts, our analysis was informed by what we (and especially Reihan, as you might expect) saw as the smartest libertarian thinking on policy issues. It isn't a coincidence that Reihan and I and Will Wilkinson all supported a payroll-tax cut as an alternative to the stimulus package, for instance: A smart right-populism and a smart libertarianism have a lot of disagreements, but a lot to talk about as well. And the whole idea of a libertarianism that engages with the welfare state as it actually exists, and seeks revolutions within the form that enhance liberty and opportunity, is roughly what I want to see from the American center-right at the moment - which makes me loath to see people who have ideas along similar lines fleeing into the center-left.